What’s next?

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This photo doesn’t have anything to do with this post apart from I took it at the weekend while thinking about new ideas on the Royal Mile, Edinburgh.

I have been thinking about the next business project for a few months now (at least 6 actually!).

I do think that the focus on grocery or food is excellent. Firstly I understand the market dynamics of the supply chain. Manufacturer, distributor, retailer and the associated benefits of each of these roles.

I also have some good contacts in the area for branding, packaging, distribution and customer acquisition. I have been impressed how many companies have launched in this area over the last 12-18 months, but I think times have changed.

When Andrew and I launched Diet Chef (way back in 2008) the barriers were a lot lower. You could work with a supplier and effectively displace consumers from bricks and mortar retail or from other segments that were badly served by e-commerce (diet being a great one at the time).

The issue is retailers are much better at online now, they have the infrastructure, staff and skills to easily launch an online service. The only thing is they are slow, but should you build an interesting online business you are going to struggle with the power of the retailers. This usually comes back to a price war – as consumers are very price focused online. If you started in the last decade you probably have a big enough moat to survive, but starting up today is another story.

In addition, customer loyalty is to new things and price, so churn of customers goes up massively.

You therefore need to understand how you will differentiate yourself compared to your competitors. Diet Chef was started with £100, I doubt that you could start today with this level of investment capital.

I am going to try and keep my thoughts on what is next to a minimum on this blog until we have actually tested a few theories. All I can tell you is it’s online and in groceries and not in anyway competitive with Diet Chef!

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